Petrobras debuts new low-sulfur diesel using vegetable oils

Rio de Janeiro (Platts)--19May2006

Brazil's Petrobras said it has developed a new technique to refine
low-sulfur diesel fuel using vegetable oil, and may use the technology to
boost diesel production in Brazil at its refineries.

The new technology, which Petrobras calls H-Bio, takes diesel fractions
and adds hydrogen and vegetable oil, such as soy, to churn out a high-quality,
low sulfur diesel fuel, the company said in a statement on its website Friday.

The fuel can be made at traditional hydro-cracking facilities and does
not require new refineries, Petrobras said. The company said that the new
technology will use 5-10% vegetable oils, a boon for the country's booming
grains industry.

Testing has already been carried out at Petrobras' Regap refinery in
Minas Gerais state, and the new diesel could be phased in
commercially over the next few years at additional refineries, the company
said. Petrobras gave no details on how much it costs to make the new diesel.

Petrobras has already been buying biodiesel refined from vegetable oil in
Brazil as the country prepares to begin mixing it with standard diesel fuel
beginning in 2008. But Petrobras has said it was working on proprietary
technologies to make the use of crops, such as soybeans, cheaper when used for
producing fuels.

Brazil is already the largest exporter of sugarcane-based ethanol, which
makes up about 40% of the fuel used by Brazil's consumer vehicle fleet.

--Josh Schneyer, newsdesk@platts.com

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